What went wrong in China ?

The news today is totally dominated by talk of the coronavirus pandemic, with occasional relief provided by the weather report. Little effort is made to review how we got here, or what to do about it.

For decades, Western academics, policy makers, captains of industry, and politicians assumed that China’s embrace of capitalist economic policies would set the stage for democratic reform. George Orwell was right when he said: “Some ideas are so stupid that only intellectuals believe them, for no ordinary man could be such a fool.”

Put in simple terms, the theory was that economic freedoms would cause the Chinese people to begin to demand political freedom, resulting in a democracy. That has not happened in China, where the Chinese Communist Party (CCP) remains firmly in power.

China has been ruled by the CCP since 1949. The regime doesn’t tolerate political competitors. It is authoritarian, an all or nothing proposition. Its goal is to control all aspects of public and private life. It controls the army, the courts, the police, the media, and the economy.

The Chinese people are merely the state’s subjects. Just consider the CCP’s version of Soviet gulags, called reeducation centers, where up to a million Muslims have been incarcerated. Student-led pro-democracy demonstrations in Hong Kong show that millions of Chinese people want to be free of the party’s yoke.

Calling out the CCP and their role in the COVID-19 pandemic is not racist. It began in China and could have been stopped at its source. But the CCP lied about this deadly virus, which cost the rest of the world many weeks of preparation, countless lives, and forced shutdowns of the American and other world economies.

No year in recent history has brought such devastation. As of April 26, there are over 202,000 deaths around the world and over 55,000 in the United States from COVID-19, according to numbers compiled by the Johns Hopkins University. People worldwide are struggling to get comfortable with the uncomfortable realities of a new normal.

The US and other countries face a Sophie’s choice: They cannot directly attack the CCP over the pandemic and its role in triggering an unparalleled global economic and public health crisis, nor hold it accountable for the COVID-19 outbreak when the world depends upon the CCP for medical supplies and protective equipment. Name-calling and demands for reparations come out of Washington, but the harsh reality is that payback is not in the cards. The CCP’s list of transgressions may be long and shameful, but the US is dependent on them for life-saving exports.

The economic downturn is a completely artificial event and any economic rebound will depend on when the public health containment policy ends and a safe and scalable vaccine is developed. The longer pandemic containment lasts, the more parts of the economy deteriorate. Truth is, the economic pain will continue into the foreseeable future.

Congress and the White House may put together another economic relief package that they will characterize as a stimulus package similar to the CARES legislation. This is a misnomer, for much of the $2.2 trillion CARES act simply made up for lost wages; it won’t generate additional spending. Politicians in Washington will be out campaigning this summer rather than engaging in serious discussions about how to decouple essential supplies coming from China.

A modest start would be to slap “buy American” provisions on government agencies and provide tax incentives for American companies to bring back their supply chain to the US or American allies. Notions about introducing legislation to allow Americans to sue China in domestic courts to “recover damages for death, injury, and economic harm caused” by the CCP’s reckless response to the COVID-19 outbreak will simply result in the party giving the middle finger to any adverse judgments, just as they do to other international institutions.

The CCP plays by its own rules.

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